Monday, June 24
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Saving Dollars: Various Banking Charges And How to Avoid Them

Transaction fees in banks are standard. At some point, it feels like anything you do with your account has a subsequent charge. From withdrawing charges to fees just to keep your account active, it can be a hassle to everyone, especially if you do the math on how much minuscule fees would accumulate in a year.

Fortunately, you don’t have to suffer from it every day. You’d be happy to know there are simple ways to avoid these fees and save up more cash in the long run. Read more below for various banking charges you’d find in a banking account and the best ways to curb them.

Overdraft Fees

Overdraft fees occur from overdraft transactions, which go past your card’s current balance. In most cases, the payment system would reject an overdraft transaction, especially if you’re using a debit card. However, some credit cards cover these overdraft transactions and add a subsequent repayment fee.

Overdraft fees vary per bank and overdraft amount, but they usually charge around $5 to $30 per use. Additionally, fees are automatically collected from your account if it remains overdrawn. Fortunately, there are two ways to go around such charges.

The first one is to avail of an overdraft protection service or by linking your checking and savings accounts into one. If an overdraft happens, your bank automatically transfers funds from your savings to cover the expense instead of coming straight from them. However, you may still expect some transfer fees, but it would be significantly less than the overdraft charge.

The second option is to anticipate the cost and ensure you have enough to cover the bill. Again, over-drafting happens because we don’t have enough cash in our accounts. Thus, try linking it to a banking app so you can check it on the go before finishing a transaction.

Maintenance Fees

Many banks charge accounts by the month as a “Service Fee” and keep it active. Depending on the bank, monthly fees may range from $5 to $25. The good thing is these fees are easy to avoid.

You can get any maintenance fees waived by keeping a minimum balance that automatically waives off the fee. Another tip is to open up a checking and savings account at the same bank. In most cases, banks would remove maintenance fees for multiple account owners.

Finally, some banks offer unique credit cards that remove first-time or long-term customers’ maintenance fees. Either way, the actual terms of the maintenance fees differ, but generally, these are the best ways to keep your account active and not pay off those pesky fees.

OON ATM Fees

OON stands for out-of-network. OON fees are added to your withdrawals whenever you use an ATM outside your bank’s partner networks. This means you need to pay additional OON fees on top of the withdrawal fees (if applicable). That said, the easiest way to curb this fee is to only transact from partnered ATMs from your bank. If your bank has an online app, checking out their ATMs before the transaction might be wise.

Another tip is to use modern banking firms. Out-of-network fees are generally charges from brick-and-mortar banking institutions, which most newer banks tend to avoid. If ATM fees are genuinely a hassle for you, it might be a good time to consider switching up to a newer bank or just stick to the partner ATMs of your bank.

Early Closing Fees

Early account deactivations also have some fees that you need to cover. Regardless, your bank may charge you a $20 to $25 fee for one last time before closing.

If you don’t want to pay the closing fees, try waiting for a few months. Most banks have a 90-day period where closing an account between the periods will incur a closing fee. After 90 days, you can effectively modify your account with no to minimal charges.

That said, check what your bank’s rules are regarding account closures before you decide to close your accounts.

Stop Checking Fee

There might be some cases in which you need to stop a check from being cashed in, especially if it’s stolen or might have some incorrect details. Nevertheless, stopping it may incur some additional fees.

Stop checking fees apply if you report a lost check at least three days before the transfer date. Remember that this fee applies to different payment types as long as it is a check. No service or platform helps you avoid stop fees except for yourself. You must be mindful of the checks you’ve been sending to ensure that you won’t receive a stop-checking fee or even stop the check.

Pay close attention when writing and delivering checks. And ensure that you have enough funds in your account for the check to work.

Inactivity Fees

If you have an account that has been left unused for way too long, your bank may apply an inactivity fee to keep it from closing. Also known as dormancy fees, these fees typically apply to accounts with no new transactions from 6 months to a year. Not all banks do this, but should they charge you, they may go up to $20.

Avoiding inactivity fees is easy, and you can just make a short transaction or transfer funds to your active account to reset the inactive period. Don’t worry; any kind of transaction of any amount works as long as there’s an activity, and then you can wait another six months to do anything to your inactive account.

Final Thoughts

Banking charges always apply to almost every activity you do. Even in moments of inactivity, banks still have such fees. Fortunately, you don’t have to do anything significant to curb such banking fees. As simple as making regular transactions and monitoring your account goes a long way in saving your money from such fees.

Understand that most banking fees depend on your banking institution’s actual terms and conditions. To keep your account safe from banking fees, understand your banking terms and see if the tips mentioned above apply to your end.

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